UBS raised its price target on Nortel ( NT), saying it expects strong spending on CDMA gear this year.

The firm boosted its target on the Canadian telecom-equipment maker to $26 from $23.50 but kept a neutral rating on the stock. UBS said that with Nortel's position in wireless weakening, the company will probably try to build up its enterprise segment and aim to become a meaningful No. 2 to Cisco ( CSCO).

UBS said Nortel might need to consider acquisitions in order to strengthen its enterprise portfolio.

Shares of Nortel were up 7 cents at $25.32.

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